Gering Public Schools sold a refinancing bond issue Wednesday, saving the district over $250,000 in bond payments.
The district’s Series 2014 General Obligation Bonds were originally used for the renovation of the Lincoln Elementary school.
The original bond issue carried an interest rate of 3.17%. The Series 2019 refinancing bonds, with a principle totaling $5,040,000 were sold with a net interest cost of 2.69%.
The lower interest rate achieved through the refinancing results in a reduction of annual debt service payments over the 15 year remaining life of the bond issue. The district now has the option to pay off the loan quicker or on the same schedule, just at a lower rate.
As part of the refinancing, the district’s bonds were upgraded from an A2 to an A1. In upgrading the District’s bond rating, Moody’s Investor Services cited the district’s tax base and sound financial condition. District business manager Tim Meisner said the refinancing secured the district’s financials into the future.
“Upgrading our bond rating to A1 is recognition of the hard work the board of education and administration has put into solidifying Gering schools financial position” Meisner said. “We will continue to find ways to keep our district on strong financial footing, such as refinancing our bonds when lower interest rates allow us to reduce our debt.”
From the cost savings over the next 15 years, the school board has not decided how they will implement that into moving the district forward.
Gering Public Schools Superintendent Bob Hastings said the board will continue to keep the levy low.
“We just found out just how much we saved, so we haven’t had an opportunity to talk about it,” Hastings said. “Our goal is to keep our tax levy as low as possible.”
Hastings hopes the savings will be appreciated by the taxpayers as the school board continues to keep the district’s tax levys low.
“The refinancing comes at a time of historically low interest rates for tax-exempt municipal bonds so the timing for the sale of bonds is particularly good.”